EXHIBIT 10.9
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, effective as
of September 17, 1997, by and between MUELLER INDUSTRIES, INC., a
Delaware corporation having its principal address at 6799 Great
Oaks Road, Suite 200, Memphis, Tennessee 38138 (the "Employer"),
and WILLIAM D. O'HAGAN, an individual residing at 9563 South Fox
Hill Circle, Germantown, Tennessee (the "Executive").
WITNESSETH:
WHEREAS, the Executive has entered into an Employment
Agreement with the Employer, effective as of January 1, 1994, as
amended by an Amendment, effective as of August 10, 1995 and as
further amended by an Amendment effective as of June 6, 1997 (the
"Existing Employment Agreement"); and
WHEREAS, the Executive and the Employer wish to modify
the terms of the Existing Employment Agreement by amending and
restating the Existing Employment Agreement in the Form of this
Amended and Restated Employment Agreement (the "Agreement");
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the Executive and the Employer hereby
amend and restate the Existing Employment Agreement as follows:
1. Term of Employment.
The Employer agrees to employ the Executive, and
the Executive hereby accepts such employment, as President and
Chief Executive Officer of the Employer, for a term commencing as
of the date hereof, and ending on December 31, 2002 (the
"Employment Period"). The preceding sentence notwithstanding,
the Executive's employment hereunder may be terminated earlier in
accordance with Section 4 hereof.
2. Duties and Authority.
During the Employment Period the Executive shall
serve as President and Chief Executive Officer of the Employer.
The Executive shall devote his best efforts and full working time
and attention to services for the Employer. The Executive agrees
to hold any additional office or position with the Employer or
any of the Employer's manufacturing subsidiaries without
additional compensation if elected or appointed to such office or
position.
3. Compensation.
a. As compensation for the Executive's services
in all capacities during the Employment Period, the Employer
shall pay the Executive the following:
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i. a base salary at a rate of $413,430 per
annum to be paid in equal installments in accordance with normal
payroll practices of the Employer but not less frequently than
monthly, provided that in each subsequent calendar year or part
thereof during which the Executive is employed commencing in
1998, the Executive's base salary shall be adjusted upward
annually from the Executive's current base salary at a rate at
least commensurate with increases granted to other key executives
(the "Base Salary").
ii. a discretionary annual cash incentive
bonus (the "Bonus") for each calendar year or part thereof during
which the Executive is employed, the amount of such bonus to be
consistent with the executive bonus program which the Employer
establishes for other key executives.
b. The Executive shall be entitled to
reimbursement for reasonable business and travel expenses
incurred in the performance of his duties in accordance with the
Employer's normal reimbursement practices.
c. Subject to the terms of the applicable plan
and/or program, the Executive shall participate in all bonus,
incentive, stock option, pension, disability and health plans and
programs and all fringe benefits plans maintained by or on behalf
of the Employer and in which senior executives of the Employer
are entitled to participate.
d. Subject to Section 4(c) herein, the
Executive's existing stock options with respect to the Employer's
common stock shall continue to be governed by and subject to the
terms and conditions set forth in the respective option
agreements.
e. The Employer agrees that, at the Employer's
cost, it will file a Registration Statement on Form S-8 (or its
equivalent) relating to the Executive's options to acquire shares
of common stock of the Employer, granted on June 22, 1992 and May
7, 1997. The Executive agrees to provide the Employer with
reasonable notice of the Executive's desire to have such a
Registration Statement prepared and filed with the Securities and
Exchange Commission.
4. Termination of Employment.
a. The Executive's employment hereunder shall
terminate upon the Executive's death, and the Employer shall have
the right to terminate the Executive's employment upon his
permanent disability. A permanent disability is a physical or
mental disability which results in the Executive's inability to
substantially perform his duties hereunder for a period of 180
consecutive days or for a period of 200 days within any period of
12 consecutive months, except that a permanent disability shall
not include a physical or mental disability which occurs in
connection with the Executive's employment hereunder. In the
event of termination by reason of death or permanent disability,
the Employer's obligation to pay further compensation hereunder
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shall cease on the date of termination, except that the Executive
(or, in the case of death, his beneficiaries, or his estate if no
beneficiary has been named) shall be entitled to receive his Base
Salary and Bonus prorated on a calendar day basis through the
date of such termination.
b. The Employer may terminate the Executive's
employment hereunder for Cause (as defined below) upon not less
than 30 days prior written notice specifying such Cause. If the
Executive's employment hereunder is terminated for Cause, the
Executive shall forfeit the Employer stock options, granted on
November 4, 1993, effective as of the date of the termination of
his employment, but such options shall remain exercisable for the
30-day period following the Executive's receipt of written notice
required under this Section 4(b). For purposes of this
Agreement, the term "Cause" shall mean (i) the Executive's
willful and continued failure to substantially perform his duties
hereunder, (ii) the engaging by the Executive in willful
misconduct which is demonstrably and materially injurious to the
Employer, or (iii) the Executive's conviction of a felony for a
crime of moral turpitude. For purposes of this Section 4(b), no
act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that his action
or omission was in the best interest of the Employer. The
Executive shall not be terminated for Cause in the case of
actions or omissions described in clauses (i) or (ii) of this
Section 4(b) unless the Employer shall have given the Executive
an opportunity to cure any such actions or omissions during the
30-day period after the Executive's receipt of written notice
required under this Section 4(b).
c. The Executive's employment hereunder may be
terminated by the Employer without Cause upon not less than 90
days prior written notice or by the Executive for "Good Reason"
(as defined below) upon not less than 10 days prior written
notice. In such event, (i) the Executive shall continue to
receive his then current Base Salary otherwise payable pursuant
to Section 3 hereof as if his employment had continued for the
remainder of the Employment Period and an annual bonus for the
remainder of the Employment Period equal to the average Bonus for
the three calendar years immediately preceding the written
notice, such bonus to be paid in the normal course at the time
other executive bonuses are normally paid, and (ii) all of the
outstanding unvested Employer stock options then held by
Executive shall immediately vest and become exercisable upon such
notice. In addition, at the Employer's expense, the Executive
shall continue to participate in all of the Employer's health
plans and programs until he reaches age 65 as if he remained
employed until such time. For purposes of this Agreement, "Good
Reason" shall mean (A) a failure by the Employer to comply with
any material provision of this Agreement which has not been cured
within ten (10) days after notice of such noncompliance has been
given by the Executive to the Employer, (B) other than as
provided in Section 2 herein, the assignment to the Executive by
the Employer of duties inconsistent with the Executive's
position, authority, duties, responsibilities or status with the
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Employer as in effect immediately after the date of execution of
this Agreement, including, but not limited to, any reduction
whatsoever in such position, authority, duties, responsibilities
or status, or a change in the Executive's titles or offices, as
then in effect, or any removal of the Executive from, or any
failure to reelect the Executive to, any of such positions,
except in connection with the termination of his employment on
account of his death, disability, or for Cause, (C) the
requirement of excessive travel on the part of the Executive,
(D) a relocation by the Employer of the Executive's principal
place of employment to any location outside a thirty mile radius
from the Executive's current principal place of employment, (E)
the failure of the Employer to have any successor to the Employer
assume the Agreement, (F) the delivery to the Executive of notice
of the Employer's decision to terminate the Executive's
employment without Cause, or (G) any other material change in the
conditions of employment if the Executive determines in good
faith that his customary duties can no longer be performed
because of the change.
d. The Executive shall also have the right to
resign voluntarily without Good Reason from employment during the
Employment Period by written notice to the Employer at least 60
days prior to the effective date of the resignation. Upon such
resignation without Good Reason, the Executive shall be entitled
to receive any accrued but unpaid Base Salary. The Employer
shall have discretion whether or not to award the Executive a
Bonus for any calendar year in which he resigns without Good
Reason.
e. If the Executive's employment shall terminate
by expiration of the Employment Period or is terminated by the
Employer for Cause pursuant to Section 4(b), or if the Executive
shall voluntarily resign for any reason other than Good Reason,
the Executive's right to receive the Base Salary (except any
accrued and unpaid salary and except as set forth in Section 4(f)
below), the Bonus, and any other compensation and benefits to
which he would otherwise be entitled under this Agreement shall
be forfeited as of the date of termination of employment;
provided, however, that if the Executive's employment hereunder
shall terminate by expiration of the Employment Period, in
accordance with Section 1 hereof, on December 31, 2002, and the
Employer and the Executive have not entered into a new employment
agreement on mutually satisfactory terms, the Executive shall be
entitled to receive the Bonus for calendar year 2002 in
accordance with Section 3(a)(ii) hereof. Employer shall be
entitled to make required withholdings from any such payment.
f. If the Executive and the Employer shall not
have entered into a new employment agreement on mutually
satisfactory terms on or prior to December 31, 2002, then
beginning on January 1, 2003, after the expiration of the
Employment Period, the Executive shall be placed on a temporary
leave of absence for six months. During said time period,
Executive shall (i) have the status of an employee of the
Company, and (ii) continue to receive Base Salary payments, but
the Employer shall have the right, at its sole election, to
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replace the Executive as the Chief Executive Officer and
President. During this leave of absence, the Executive shall not
be precluded by this Agreement from seeking or obtaining new full
time employment. At the end of said six-month temporary leave of
absence, if the Executive and the Employer shall not have entered
into a new employment arrangement, the Executive's employment
shall be automatically terminated. In such event, the Executive
shall not be entitled to any severance payments.
g. Except as provided in Section 4(b) hereof, or
any relevant option agreement, the Executive's death or
termination of employment shall not affect his rights under any
Employer stock options.
h. Notwithstanding anything to the contrary
herein, the Executive may also terminate his employment upon a
"Change in Control" (as hereinafter defined). If the Executive
terminates his employment upon a "Change in Control" then:
i. the Employer shall pay the Executive as
severance pay in a lump sum within thirty (30) days following
such termination, the following amounts, which shall not be
discounted to take into account present value:
(1) the Executive's Base Salary through
the date of termination at the rate
in effect immediately prior to the
termination date;
(2) an amount equal to the product of
(x) the Executive's annual Base
Salary at the rate in effect
immediately prior to the date of
termination, multiplied by (z) the
number of years (including partial
years) then remaining in the
Employment Period; and
(3) an amount equal to the product of
(x) the average annual Bonus for
the three calendar years
immediately preceding the date of
termination, multiplied by (z) the
number of years (including partial
years as full years) then remaining
in the Employment Period;
ii. the Employer shall, at the Employer's
expense, allow the Executive to continue to participate, until he
reaches age 65, in all the Employer's benefits, to the same
extent and upon the same terms and conditions as the Executive
participated immediately prior to the termination, provided that
the Executive's continued participation is permissible or
otherwise practicable under the general terms and provisions of
such benefit plan; and
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iii. on the later of (x) the day the
Executive notifies the Employer he is terminating upon a Change
in Control, and (y) ten (10) days prior to the date the Executive
actually terminates his employment, all remaining unvested
options previously granted the Executive shall become immediately
exercisable on that date.
"Change in Control", as used in Section 4(h) of the
Agreement, is defined to mean the occurrence of any of the
following three events:
(i) a change in control of a nature that
would be required to be reported in response to any form or
report to the Securities and Exchange Commission or any stock
exchange on which the Employer's shares are listed which requires
the reporting of a change in control of the Employer;
(ii) when any "person," as such terms is used
in Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), is or becomes the "beneficial
owner," as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of 20% of the voting power of the Employer's then
outstanding securities, other than (x) beneficial owners of more
than 5% of the Employer's Common Stock on August 10, 1995, (y)
"Exempted Persons" as defined in Section 1(a) of the Employer's
Rights Agreement, dated as of November 10, 1994, (z) mutual
funds, banks, investment advisors registered under the Investment
Advisers Act of 1940, as amended, and other institutional
investors, which either (i) became 20% beneficial owners as a
result of an acquisition of Common Stock by the Employer which,
by reducing the number of such shares then outstanding, increases
the proportionate number of shares beneficially owned by such
person to 20% or more of the outstanding Common Stock except that
if such person, after such share purchased by the Employer,
becomes the beneficial owner of any additional shares of Common
Stock, then this exception would not apply, or (ii) were exempted
from the operation of this provision with the prior approval of
eighty percent of the Board of Directors of the Employer; or
(iii) when the individuals who, on the
effective date of this Agreement constitute the Board of
Directors of the Employer cease for any reason to constitute at
least a majority thereof, provided, however, that a director who
was not a director on the effective date of this Agreement shall
be deemed to have been a director at that date if such director
was elected by, or on the recommendation of or with the approval
of, at least sixty percent of the directors who were directors on
the effective date of this Agreement (either directly or by prior
operation of this provision);
provided, however, that an occurrence shall cease to be a "Change
in Control" for purposes of this Section 4(h) six months after
the occurrence of an event that would otherwise constitute a
"Change in Control," except that, for purposes of computing this
six-month period, the six-month time period shall not commence
until, as to clause (i), the date on which a change in control
form or report is actually filed, and as to clause (ii), the date
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on which a beneficial owner discloses in a public filing that it
has crossed the 20% threshold.
5. Notices.
Any notice or other communication hereunder shall
be made in writing by hand-delivery and shall be deemed to have
been delivered and received when delivered by hand, if personally
delivered, as follows: (a) if to the Executive at the address
shown at the beginning of this Agreement or to such other
person(s) or address(es) as the Executive shall have furnished to
the Employer in writing, and (b) if to the Employer at the
address shown at the beginning of this Agreement, attention of
the Board of Directors, with copies to the Employer at the same
address, Attention: General Counsel, and to Willkie Farr &
Gallagher, One Citicorp Center, 153 E. 53rd Street, New York, New
York 10022, Attention: Robert B. Hodes, Esq., or to such other
person(s) or address(es) as such persons or the Employer shall
have furnished to the Executive in writing.
6. Certain Additional Payments by the Employer.
a. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
payment, distribution, waiver of Employer rights, acceleration of
vesting of any stock options or restricted stock, or any other
payment or benefit in the nature of compensation to or for the
benefit of the Executive, alone or in combination (whether such
payment, distribution, waiver, acceleration or other benefit is
made pursuant to the terms of this Agreement or any other
agreement, plan or arrangement providing payments or benefits in
the nature of compensation to or for the benefit of the
Executive, but determined without regard to any additional
payments required under this Section 6) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code (or
any successor provision) or any interest or penalties are
incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by
the Executive of all taxes with respect to the Gross-Up Payment
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
b. Subject to the provisions of Section 6(c),
all determinations required to be made under this Section 6,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by the
nationally recognized accounting firm then auditing the accounts
of the Employer (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Employer and the
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Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time
as is requested by the Employer. In the event that the
Accounting Firm is unwilling or unable to perform its obligations
pursuant to this Section 6, the Executive shall appoint another
nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred
to hereunder as the Accounting Firm). All fees and expenses of
the Accounting Firm shall be borne solely by the Employer. Any
Gross-Up Payment, determined pursuant to this Section 6, shall be
paid by the Employer to the Executive within five days of the
receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the
Employer and the Executive. The parties hereto acknowledge that,
as a result of the potential uncertainty in the application of
Section 4999 of the Code (or any successor provision) at the time
of the initial determination by the Accounting Firm hereunder, it
is possible that the Employer will not have made Gross-Up
Payments which should have been made consistent with the
calculations required to be made hereunder (an "Underpayment").
In the event that the Employer exhausts its remedies pursuant to
Section 6(c) and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Employer to or for the
benefit of the Executive.
c. The Executive shall notify the Employer in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Employer of the
Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than 20 business days after the
Executive is informed in writing of such claim and shall apprise
the Employer of the nature of such claim and the date on which
such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following
the date on which he gives such notice to the Employer (or such
shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Employer notifies the
Executive in writing prior to the expiration of such period that
it desires to contest such claim, the Executive shall:
i. give the Employer any information
reasonably requested by the Employer relating to such claim,
ii. take such action in connection with
contesting such claim as the Employer shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an
attorney reasonably selected by the Employer,
iii. cooperate with the Employer in good
faith in order effectively to contest such claim, and
iv. permit the Employer to participate in
any proceedings relating to such claim;
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provided, however, that the Employer shall bear and pay directly
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without
limiting the foregoing provisions of this Section 6(c), the
Employer shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax
claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate
courts, as the Employer shall determine; provided, however, that
if the Employer directs the Executive to pay such claim and sue
for a refund, the Employer shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Employer's control of the
contest shall be limited to issues with respect to which a Gross-
Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
d. If, after the receipt by the Executive of an
amount advanced by the Employer pursuant to Section 6(c), the
Executive becomes entitled to receive any refund with respect to
such claim, the Executive shall (subject to the Employer's
complying with the requirements of Section 6(c)) promptly pay to
the Employer the amount of such refund (together with any
interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount
advanced by the Employer pursuant to Section 6(c), a
determination is made that the Executive shall not be entitled to
any refund with respect to such claim and the Employer does not
notify the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
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7. Executive Loan.
The Employer agrees, at Executive's option, to
lend Executive up to five million dollars ($5,000,000), on a full
recourse basis, which loan would be evidenced by a promissory
note in favor of the Employer, in the form attached as Exhibit 1
to the Agreement.
8. Assignability.
This Agreement shall not be assignable by the
Employer except to a majority-owned subsidiary or parent entity
of the Employer and shall be binding upon and inure to the
benefit of the Employer and its successors and assigns. This
Agreement shall not be assignable by the Executive, but it shall
be binding upon, and to the extent provided in Section 4(a) shall
inure to the benefit of, the Executive's heirs, executors,
administrators and legal representatives.
9. Entire Agreement.
This Agreement supersedes the Existing Employment
Agreement and all prior understandings between the Executive and
the Employer as to the subject matter hereof.
10. Waivers, Amendments and Further Agreements.
Neither this Agreement nor any term or condition
hereof, including without limitation the terms and conditions of
this Section 10, may be waived, modified or amended in whole or
in part as against the Employer or the Executive except by
written instrument executed by each of the parties expressly
stating that it is intended to operate as a waiver, modification
or amendment of this Agreement or the applicable term or
condition hereof. Each of the parties hereto agrees to execute
all such further instruments and documents and to take all such
further action as the other party may reasonably require in order
to effectuate the terms and purposes of this Agreement.
11. Severability.
In case one or more of the provisions contained in
this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12. No Conflicting Obligations.
The Executive represents and warrants to the
Employer that the Executive is not now under any obligation to
anyone other than the Employer and other entities of which he is
a non-executive director and has no interest which is
inconsistent or in conflict with this Agreement, or would
prevent, limit or impair, in any way, the Executive's performance
of any of the covenants or duties hereinabove set forth.
However, subject to Section 2 hereof, nothing herein shall be
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deemed to limit the Executive's participation in, or pursuit of,
non-conflicting business interests.
13. Survival.
Except as otherwise provided herein, the
covenants, agreements, representations and warranties contained
in or made pursuant to this Agreement shall survive the
Executive's termination of employment, irrespective of any
investigation made by or on behalf of any party.
14. Governing Law.
This Agreement shall be governed by and construed
and enforced in accordance with the law of the State of
Tennessee, without regard to the principles of conflicts of law
thereof.
15. Arbitration; Legal Fees.
Any dispute, controversy or claim arising out of
or relating to this Agreement or the breach thereof shall be
finally settled by arbitration by a single arbitrator in
accordance with the rules then in effect of the American
Arbitration Association in an arbitration in Memphis, Tennessee.
Judgment upon an award rendered by the arbitrator may be entered
in any court of competent jurisdiction. To the extent that the
Executive prosecutes or defends, whether by arbitration or
through a judicial proceeding, a dispute, controversy or claim
relating to this Agreement which results in a judgment, award or
settlement in the Executive's favor in any material respect, the
Employer shall reimburse the Executive for all reasonable fees
and costs (including legal fees) incurred by the Executive in
such successful prosecution or defense.
16. Headings.
The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
17. Counterparts.
This Agreement may be executed in counterparts each of
which shall be deemed an original but which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed or caused to be
executed this Agreement effective as of the date first above
written.
MUELLER INDUSTRIES, INC.
By: /s/ Harvey L. Karp
Name: Harvey L. Karp
Title: Chairman of the Board
Date: September 17, 1997
/s/ William D. O'Hagan
William D. O'Hagan
Date: September 17, 1997
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EXHIBIT 1
[Form of Promissory Note]
PROMISSORY NOTE
$_____[1]_____ _____[2]_____
William D. O'Hagan, an individual living at ___________________________
_________[3]_____________("Borrower"), hereby promises to pay to Mueller
Industries, Inc., a Delaware corporation ("Mueller") the
principal sum of _____[1]_____ ($________[1]________), on the
earlier of (i) the date Mueller pays Borrower any severance pay
pursuant to Section 4 of Borrower's Employment Agreement with
Mueller, and (ii) December 31, 2002, and to pay interest
(computed on the basis of a 360-day year) on the unpaid principal
balance thereof from the date of this Note at the rate of
________[4]________ percent (__[4]__%) per annum until the principal
amount hereof shall become due and payable. Interest is payable
on March 15 of each year, but, at Borrower's option, can be
deferred until the maturity date of the Note to the extent such
interest payment exceeds the after-tax portion of Executive's
bonus for the preceding fiscal year.
Payments of principal and interest shall be made in
such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and
private debts to the address designated by Mueller.
This Note shall be secured by either (A) common stock
of Mueller having, at the time the Note is executed, a fair
market value of at least 125% of the face amount of the Note, or
(B) other marketable property acceptable to Mueller having, at
the time the note is executed, a fair market value of at least
150% of the face amount of the Note. Borrower shall deliver such
stock or other acceptable property to Mueller within ten (10)
days of the time this Note is executed, and shall take such
further action, and execute such further documents, as Mueller
deems necessary to fully perfect its security interest in the
pledged collateral. Borrower represents that the pledged
collateral is currently unencumbered and agrees that he will not
otherwise sell, assign, pledge, encumber, transfer or otherwise
hypothecate said stock or other acceptable property so long as
this Note is outstanding, provided, however, that if Borrower has
pledged shares of common stock of Mueller, Borrower is free to
sell any or all such shares so long as the Borrower pays down
this Note with the net after-tax proceeds from any such sale.
Borrower and Mueller agree to cooperate, in the event of a
partial sale, in order to facilitate such a sale, while
preserving Mueller's security interest in the remaining shares.
If Borrower shall default in the payment of interest or
principal on the Note when the same shall become due and payable
and such default continues for more than ten (10) days after
receipt of written notice from Mueller, Mueller shall have and
may execute all rights and remedies afforded to a secured party
under the Tennessee Uniform Commercial Code applicable thereto,
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including, without limitation, the right to sell the pledged
collateral at a public or private sale (provided that Mueller
shall give Borrower at least fifteen (15) days prior written
notice of the date in which any public sale is to be held or the
date after which any private sale may be made), at which sale
Mueller may purchase such pledged collateral and have the right
to retain such pledged collateral in partial or full satisfaction
of Borrower's obligations under the Note in accordance with the
provisions of the Tennessee Uniform Commercial Code.
This Note may be prepaid, at any time, in whole or in
part, without penalty.
THIS NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, INTERNAL TENNESSEE LAW.
_____________________
William D. O'Hagan
1. Principal amount of Note is equal to the amount requested be
loaned, up to $5,000,000.00.
2. Date shall be date Borrower borrows money from Mueller
pursuant to this Note.
3. Borrower's then current residential address shall be inserted.
4. The interest rate shall be the higher of (i) the comparable
treasury rate in effect when this Note is executed, and (ii)
the rate at which Mueller is itself then able to borrow funds
having a comparable maturity, in each case based on the length
of time between the date the note is executed and December 31,
2002.
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